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FDA User Fee Revenue Exceeds $7B, Analysis Shows

User fees have brought in $7.67 billion since pharmaceutical companies began paying the fees in 1992, according to an analysis released Monday by Avalere Health.

The fees are paid by pharmaceutical manufacturers and were created to speed drug approvals by the Food and Drug Administration. The fees have increased every year since 1992, mostly because of higher application fees, according to Avalere, an independent consulting company.

Manufacturers pay fees for each product that they see on the market, annual establishment fees and application review fees when they submit a new pharmaceutical for review.

But the FDA expects to reduce its collections for fiscal year 2017, having “significant leftover collections from the previous 4 years,” the analysis reads. The 2017 data is estimated based on the rate fee established by the FDA.

“The significant unspent funds left over from user fee programs suggest that FDA could do more to accelerate product reviews,” said Jay Jackson, manager at Avalere, said in a statement. “Particularly with public concern around drug prices, speeding approval of the second-to-market products can increase competition that may result in lower net prices.”

By law, the FDA is required to consider how much the agency has brought in through user fees in recent years when setting its fees, Jackson said in an email.

The four user fee acts — the Prescription Drug User Fee Act, the Generic Drug User Fee Act, the Medical Device Drug User Fee Act, and the Biosimilar User Fee Act — are all up for reauthorization by Sept. 30 of next year. Stakeholders met Monday for a public hearing on the goals letter outlining a general agreement for the reauthorization process among stakeholders.

The reauthorization process comes as the political focus on prescription drug prices has grown sharper. Some lawmakers say the FDA drug approval process needs to be faster in order to increase competition and drive down costs.

“While new drug approvals increased recently, they have not kept up with the number of innovative ideas entering clinical trials, and we need to consider where the road blocks are to more efficient development,” Gillian Woollett, a senior vice president at Avalere, said. “FDA review timing is a critical element.”